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Bangladeshi industries facing fights with labor

On August 31, workers at Biman Bangladesh Airlines demonstrated at the national headquarters of the air carrier and demanded that the airline stop its attacks on their wages. When the managing director Zakiul Islam refused to meet with them, his staff locked him inside his office. They protested for most of the day and agreed to leave and reconvene at the Board of Director’s meeting that was taking place the following day. They did also threaten to strike and bring the airline to a standstill if their demands were not met.

At the heart of the conflict between managers and workers are the new pay scale that the airline is implementing in order to boost profits and the elimination of the pension scheme. Some 3,000 workers will lose their pensions if the restructuring goes forward. The airline company, incidentally, also just recently went public, making it the country’s largest public limited company. The workers were demanding a return to the government pay scale that they had in place before. The new pay structure would mean that workers would not see their wages rise as much as they had been promised. And since they are government employees, they had been counting on see their wages rise as much as their counterparts in other public industries.

As indicated in this study, the main actors in the sector are convinced that there is more to competitiveness and productivity than just low labor costs. If investment in infrastructure to improve lead times and facilitate trade is key to Bangladesh’s competitiveness, developing and implementing supportive policies, and improving governance at the national and factory levels is also crucial. International buyers are not simply focusing on cost and the bottom line. Because buyers are looking for “more,” it is in the interest of government officials to enact policies that will increase worker benefits (wages, health care, etc.). It is also in the interest of factory owners to implement these policies, so that they will gain a workforce that is better skilled and more productive. Bangladeshi factories are no longer sweatshops with minimal labor standards and workers toiling away for 20 hours a day. Many factories are now focusing on becoming more efficient, with a happier and healthier workforce. Labor awareness, compliance issues, an improved public image, and changes in the conditions of global competition have all led to these improvements. Further positive developments in this area will compel the developed nations to look on the country more favorably.

One of the problems that a study like this one overlooks is that there are structural impediments to reform in the garment industry, including the deep connections between the factory owners and the government which means that they are both inclined to use their power to extract concessions from workers rather than from themselves whenever possible. Here’s how Jeremy Seabrook puts it:

More than 30 MPs of the ruling Awami League are factory owners. This is reflected in the government’s response to unrest. After the April disturbances, the Home Minister said: “No one will be spared if found to be involved in creating unrest in the garments sector.” Government said it had “information that outsiders often fuel trouble in this sector.” The ruling elite cannot imagine that poverty, and not malice, drives people, although owners spend as much on a night out as their workers earn in a year. In any case, they prefer to see in the unrest evidence of conspiracy or sabotage by their political opponents.

As a result (and as I’ve argued previously), the workers in the garment industry are compelled to fight back. As Bangladesh News reported, some of the more militant unions are focusing on the non-payment of Eid bonuses this year to organize workers in a more combative posture. In fact, the organizing seems to have reached a substantial enough pitch that the Bangladeshi police are encouraging factory owners to pay the Eid bonuses on time to avoid another round of labor unrest. They have collected reports that there is substantial organizing activity in more than 110 factories (there are more than 6500 garment factories in Bangladesh).

In response to the environmental problems produced by Bangladesh’s ship-breaking industry (an industry which it needs to provide steel for national industries since there are few iron deposits in Bangladesh), a Dutch company is proposing building the world’s first “green dock wharf” in Bangladesh. It would be equipped with the necessary technology to deal with the hazardous chemicals on board these ships and safely recycle them. I’m interested in seeing how this develops.